Recording Payroll and Payroll TaxesThe following data are taken from Stockton Wholesale Company’s May payroll: Administrative salaries$50,000Sales salaries51,000Custodial salaries7,000Total payroll$108,000Salaries subject to 1.45 percent Medicare tax$108,000Salaries subject to 6.2 percent Social Security tax85,000Salaries subject to federal unemployment taxes14,000Salaries subject to state unemployment taxes21,000Federal income taxes withheld from all salaries17,800Assume that the company is subject to a two percent state unemployment tax (due to a favorable experience rating) and a 0.6 percent federal unemployment tax.RequiredRecord the following in general journal form on May 31:a. Accrual of the monthly payroll.b. Payment of the net payroll.

Federal income taxes (FIT) are imposed in USA. Tax is calculated by applying tax rates which…

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College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter8: Employer Taxes, Payments, And Reports

Section: Chapter Questions

Problem 1E

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Recording Payroll and Payroll Taxes
The following data are taken from Stockton Wholesale Company’s May payroll:

Administrative salaries	$50,000
Sales salaries	51,000
Custodial salaries	7,000
Total payroll	$108,000
Salaries subject to 1.45 percent Medicare tax	$108,000
Salaries subject to 6.2 percent Social Security tax	85,000
Salaries subject to federal unemployment taxes	14,000
Salaries subject to state unemployment taxes	21,000
Federal income taxes withheld from all salaries	17,800

Assume that the company is subject to a two percent state unemployment tax (due to a favorable experience rating) and a 0.6 percent federal unemployment tax.

Required
Record the following in general journal form on May 31:
a. Accrual of the monthly payroll.
b. Payment of the net payroll.

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